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Financing dispute resolution

How can I finance my dispute resolution?

There are several options. The most suitable will depend on your financial circumstances and the merits of your claim or defence.

1. Privately Funded and Recovery of Costs

Most dispute resolution is funded privately. Our fees are usually calculated on an hourly basis and you will receive bills regularly so that you know the exact position with costs. We will also give you an advance estimate of costs which can be revised if necessary. Details of our hourly rates and terms of business will be sent out to you before you confirm your instructions to us.

The usual rule in litigation (and a common one in arbitration) is that the loser is ordered to pay the majority of the winner's costs. This rule may vary depending on how the parties have behaved and whether any settlement offers have been made. For example, if a defendant loses at trial but has to pay no more than he offered months earlier, he may recover costs he incurred after he made the offer.

The amount of costs recovered will also vary. If at the end of litigation the parties cannot agree, costs will be assessed. Where they are assessed on the standard basis, the winner usually recovers between 60% and 80% of his costs, although he may recover more if the other side has behaved badly or if he is a claimant who wins more than his own earlier settlement offer.

Since April 2013 many court claims have required costs budgets to be filed by each party. If agreed, or if a court makes an order on the costs budgets, then that will form a likely level of costs recovery for the winning party.

2. Legal Expense Insurance

Sometimes you will find that your existing insurance policies will cover legal expenses. You should always check your policies to see if you can claim through your insurance.

3. “After the Event” Insurance

There are a number of insurance companies which  offer legal costs insurance which can be taken out after a dispute has arisen to cover your opponent's costs should you lose and be ordered to pay them.

Premiums usually range from 10% to 40% of the likely cost of taking your dispute to trial. The premium depends on the prospects of success and how soon you take the insurance out; the sooner the cheaper, as there is more chance the case will settle through ADR in which case there will be no costs order. New insurance options are being introduced all the time, and we can discuss with you what might be appropriate to your case. 

The insurance company often requires you to pay for a barrister to consider your case who will then give an opinion on the merits. The cost of this opinion varies according to the nature and complexity of your case. We will give you a quote so that you are clear as to the expense you are likely to incur.

4. Conditional Fee or Damages Based Agreements

We may be able to represent you on a "No Win, No Fee" or “No Win, Reduced Fee” basis. Your case will be referred to a panel within the department who, although unlikely to be dealing with your case themselves, will assess the merits of the case. If we feel that the merits are sufficiently strong and it is the type of case suitable for this kind of fee arrangement, then we will agree terms with you at that stage. The options are:

  • A Conditional Fee Agreement (or “CFA”): We record our time, but do not bill it if you lose. If you win, or achieve a favourable settlement, we are entitled to an agreed percentage uplift on our fees to compensate us for the risk we took.
  • A “blended” CFA: A “No Win, Reduced Fee” basis, where an agreed fraction of our hourly rates is paid in the usual way, with the rest being treated as a CFA as described above.
  • A Damages Based Agreement: In cases where substantial damages are likely to be recovered, we may agree to be paid a percentage of those damages.

These options may involve you taking out “After the Event” insurance cover at the same time for the risk of paying the other side’s costs.

6. Other Options

We are always willing to discuss other options for funding a case subject to legal and practical limitations. For example, we may agree a fixed fee or a “Blended Hourly Rate” of a specified amount which will apply to time spent on the case by all fee earners no matter what their level of seniority.

Additional information